No End in Sight for Malaysia’s Power Struggle as 1MDB Scandal Deepens

A new report by the Wall Street Journal (WSJ) alleges that deposits into the personal account of Malaysia’s Prime Minister Najib Razak topped $1 billion, thereby threatening to deepen an ongoing scandal surrounding the premier’s involvement in mismanaging money linked to a beleaguered state fund.

The WSJreport, just the latest in a series of damaging reports by the newspaper which started in July 2015, cites sources as saying that most of the money deposited into Najib’s account is linked to the 1 Malaysia Development Berhad (1MDB), a debt-ridden state investment fund at the center of a high-profile corruption scandal. Najib has denied using government funds for personal gain.

The allegation that the deposits into his bank accounts are hundreds of millions more than the $681 million that was first reported by WSJ — allegedly a (heretofore unexplained) legal donation from a member of the Saudi royal family — is likely to deepen what some have called the biggest scandal in Malaysian history. The aforementioned report also contradicts the conclusions reached by the Najib-appointed replacement Malaysian attorney general, who had cleared the premier of criminal charges and declared the case closed earlier this year.

Najib’s alleged involvement in the 1MDB scandal has already triggered a political struggle between his critics, who want the embattled premier removed from power, and Najib and his allies, who have fought back viciously. Back in July 2015, Najib purged his cabinet of dissenters, including Deputy Prime Minister Muhyiddin Yassin, who in late February was also suspended from the ruling party, the United Malays National Organization (UMNO). Najib also installed a new attorney general in July 2015, threatened to sue the WSJ for false reporting (to no avail so far), and blocked access to news websites to curb public criticism.

However, as the latest WSJ report has proven, such attempts to contain the raging public scandal have not been successful. Abroad, foreign media outlets cannot be controlled as local ones can. And at home, the crisis has evolved into one that has reached the highest levels of the political elite. The most recent indication of this is news that Mahathir Mohamad, the 90 year-old ex-premier who is one of the fiercest and most outspoken critics of Najib, has officially dissociated himself from UMNO for a second time. As an explanation, Mahathir said the UMNO has now become “Najib’s party.” Mahathir now claims to lead a political alliance to remove Najib and has called for this to become a national movement, insisting that “the damage will be worse and worse” if Najib is allowed to remain in office.

There are no protagonists and antagonists in this unfolding political drama. Consumed with overthrowing Najib, Mahathir is even willing to embrace the enemy of his enemy – the political opposition, his new friend. Despite Mahathir’s shifting allegiances, seasoned observers of Malaysian politics have not forgotten that many of Najib’s tactics — axing his deputy, media clampdowns, and questioning the motives of global investigators — come straight out of from Mahathir’s own playbook. Yet even former deputy prime minister turned opposition leader Anwar Ibrahim, who was ousted during Mahathir’s reign and has now been imprisoned on sodomy charges under Najib, will join the fray from his prison cell to topple scandal-ridden Najib.

If the past is any indicator, there will not be a quick end to the current political imbroglio. Najib’s power and support within the party remain strong, which is a major factor in Malaysian politics. The next moves of Muhyiddin, along with Mahathir’s son Mukhriz, will affect how quickly the Mahathir-led alliance will move forward to topple Najib, within the legal limits of civil disobedience (as Mahathir is careful to emphasize). Meanwhile, Team Najib is digging in for the long haul. The government has reportedly protected the final 1MDB audit report from further scrutiny by classifying it under the Official Secrets Act (OSA) of 1972.

As the 1MDB scandal continues to deepen and such political power plays continue to affect the country’s economy and distract its leaders from addressing key concerns, the question for Malaysia is just how long the country can continue in such a state. Malaysia’s next election does not have to be held until August 2018, and Najib show few signs of stepping down, especially given his strong position within his party and the relatively weakened state of the opposition. But his opponents also smell blood and have also refused to give up their campaign against the ailing premier, who they feel will lose more popular – and, perhaps, even party – support the more this drags on. In all this, the big loser is arguably the Malaysian people, who are witnessing an elite power struggle that continues to unfold as the country’s manifold challenges go unaddressed.